01—Abstract
Summary
Summary of the 10-K filed February 12, 2026. Cited figures are marked; the original filing is the authoritative source.
DexCom (DXCM) reported a strong fiscal 2025, with revenue rising 16% to $4.66 billiona, gross profit up 15% to $2.80 billion, operating income up 52% to $911.8 million, and net income up 45% to $836.3 million (diluted EPS $2.09, versus $1.42 in 2024).
Growth was driven by disposable sensor volume, with roughly 600,000 to 700,000 net new customers added excluding Stelo, partly offset by pricing headwinds from greater rebate eligibility and channel mix. Gross margin slipped to 60.1% from 60.5%, attributed to supply-availability inefficiencies, lower production yields, and replacement costs. Operating cash flow reached $1.44 billionb, and cash plus short-term securities ended the year at $2.00 billion after repaying the $1.21 billion 2025 convertible notes at maturity.
The filing also flags several headwinds. CMS has added CGMs to the DMEPOS competitive bidding program, with contracting starting in 2027 and payment changes effective in 2028; management expects lower Medicare reimbursement for CGMs from 2028. The company remains under an FDA warning letter issued in March 2025 covering its San Diego and Mesa facilities, and it faces multiple securities class actions and G6/G7 product class actions.
Competitive pressure is rising from Abbott, Medtronic (MiniMed), and wellness-focused wearable entrants, and a January 2026 FDA guidance broadened the 'general wellness device' category. The company is also investing heavily in manufacturing, with property and equipment rising to $1.56 billionc and a new Ireland facility under construction. Capital allocation remained active: the company repurchased $500 million of stock in 2025 under a $750 million program, leaving $250 million authorized through June 2026.
The $1.25 billiond 2028 convertible notes remain outstanding, and the $200 million revolving credit facility is undrawn and expires in 2026. Management reports effective internal controls, and Deloitte issued an unqualified opinion. Investors should weigh the strong earnings momentum against the 2028 Medicare pricing reset, regulatory and litigation overhang, and rising competition.
02—Key points
Key Highlights
- Revenue grew 16% to $4.66B and operating income rose 52% to $911.8M, with net income up 45% to $836.3M (diluted EPS $2.09 vs. $1.42).
- Gross margin contracted slightly to 60.1% from 60.5%, as supply inefficiencies, lower yields, and replacement costs offset volume gains.
- Operating cash flow reached $1.44B, and cash plus short-term securities totaled $2.00B after repaying $1.21B of 2025 convertible notes.
- CMS added CGMs to DMEPOS competitive bidding (contracts 2027, payment changes 2028), with management expecting lower Medicare reimbursement for CGMs beginning in 2028.
- Regulatory and legal overhang persists: an FDA warning letter (March 2025) remains open, and multiple securities and G6/G7 product class actions are pending.
- Competition is intensifying from Abbott, Medtronic (MiniMed), and wellness wearables after FDA's January 2026 broadening of 'general wellness device' guidance.
- Capital returns continued, with $500M of buybacks in 2025 under a $750M program, and $1.25B of 2028 convertible notes remain outstanding.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Dexcom Inc kept $0.18.
- Revenue$4.66B100.0%
- Cost of revenue−$1.86B39.9%
- Gross profit$2.80B60.1%
- Operating costs−$1.89B40.5%
- Operating income$911.8M19.6%
- Interest, other & tax−$75.5M1.6%
- Net income$836.3M17.9%
Where FY2025 revenue went
$4.66B- Cost of revenue: $1.86B, 40% of revenue
- SG&A: $1.29B, 28% of revenue
- Net income: $836.3M, 18% of revenue
- R&D: $599.1M, 13% of revenue
- Interest, other & tax: $75.5M, 1.6% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 12, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $4.66B$4.03B | +15.6% |
| Cost of Revenue | $1.86B$1.59B | +16.6% |
| Gross Profit | $2.80B$2.44B | +14.9% |
| R&D Expenses | $599.10M$552.40M | +8.5% |
| SG&A Expenses | $1.29B$1.29B | +0.4% |
| Operating Expenses | $1.89B$1.84B | +2.8% |
| Operating Income | $911.80M$600.00M | +52.0% |
| Interest Expense | $14.30M$14.90M | −4.0% |
| Net Income | $836.30M$576.20M | +45.1% |
| EPS (Basic) | $2.14$1.46 | +46.6% |
| EPS (Diluted) | $2.09$1.42 | +47.2% |
| Shares Outstanding (Basic) | 390.20M393.60M | −0.9% |
| Shares Outstanding (Diluted) | 405.50M412.70M | −1.7% |
05—Questions
Frequently Asked Questions
How strong was DexCom's profitability in fiscal 2025?
Profitability improved markedly. Operating income rose 52% to $911.8 million, reflecting 20% operating margin versus 15% in 2024, and net income rose 45% to $836.3 million. Diluted EPS was $2.09, up from $1.42. Other income, including $78.1 million of equity investment gains, also contributed.
What is the main risk to DexCom's future Medicare revenue?
CMS's DMEPOS competitive bidding program will apply to CGMs, with contracting beginning in 2027 and payment changes effective in 2028. Payment will be set at the 75th percentile of winning bids, and monthly rental payments will be phased in. Management expects Medicare reimbursement for its CGM systems to decline beginning in 2028, and the outcome depends on whether regional or national bidding areas are used.
Is the FDA warning letter a material threat to operations?
The warning letter, received in March 2025 after inspections of the San Diego and Mesa facilities, does not restrict production, distribution, or 510(k) submissions, and it does not require product recalls. However, the company says it may not satisfy FDA's expectations, which could lead to further enforcement actions such as consent decrees, injunctions, or product restrictions. Until the issues are resolved, the risk remains open.
How is DexCom's balance sheet positioned for its debt obligations?
Liquidity is solid. The company held $2.00 billion in cash and short-term securities at year-end and repaid the 2025 notes in cash. The remaining $1.25 billion of 0.375% convertible notes mature in May 2028, and the $200 million revolver is undrawn but expires in October 2026. Management believes it can service its debt, though refinancing or conversions could affect liquidity and dilution.
06—Continue